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ANDERSON COOPER 360 DEGREES

New Osama bin Laden Tape Released?; Supreme Court Overrules Bush Administration on Military Tribunals

Aired June 29, 2006 - 22:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


ANDERSON COOPER, CNN ANCHOR: Breaking news: a chilling message purported to be from none other than Osama bin Laden.
(BEGIN VIDEOTAPE)

ANNOUNCER: Tonight: a new tape from Osama bin Laden. What does it say? What does it mean? We will investigate.

A stunning ruling by the Supreme Court -- a hefty loss for the Bush administration, military tribunals thrown out. What happens now to those left at Guantanamo Bay?

Washed away -- floods rip people's home and way of life -- tonight, death and destruction in the Northeast, as the rain continues to fall.

And fugitive polygamist Warren Jeffs, he's been using your money to run his cult. But is a judge about to take his millions away? That , John Walsh talks with Anderson about the hunt for one of the FBI's most-wanted men.

(END VIDEOTAPE)

ANNOUNCER: Across the country and around the world, this is ANDERSON COOPER 360.

Live from the CNN studios in New York, here's Anderson Cooper.

COOPER: Good evening again. We begin with breaking news, the kind that raises a chill whenever it happens, a new message tonight, an audiotape purported to be from Osama bin Laden. It came out just moments ago.

CNN's Octavia Nasr has been translating it and joins us now from the newsroom in Atlanta.

Octavia, what does it say?

OCTAVIA NASR, CNN SENIOR EDITOR FOR ARAB AFFAIRS: Well, it's less than 20 minutes, Anderson.

And what it says, basically, it's condolences. It talks about the death of Zarqawi, the al Qaeda leader in Iraq. It does attack President Bush.

And, you know, when we say purported to be bin Laden, I listened to the tape myself. The experts we talked to, they -- they think it is bin Laden. I personally think it is bin Laden. But CNN can never confirm it is him, because we're dealing with an audiotape.

Let's take a look at what he said on that tape, two interesting things. He addressed President Bush.

And he said: I say to Bush, you should deliver the body to his family. And don't be too happy. Our flag hasn't fallen. Thanks to God, it has passed from one lion to another lion in Islam.

And then he continues. In the same paragraph, he says: You have prevented Abu Musab from entering his homeland, meaning Jordan, alive. Don't stand in his way now.

Experts I spoke with consider this to be an interesting appeal, to allow the body of Abu Musab al-Zarqawi to return to his homeland. Also, he mentions Zarqawi by his initial name, Ahmad al-Khalayleh, which is also another indication that he's really sending his respects to the man as a jihadi and also as a normal human being -- Anderson.

COOPER: Octavia Nasr, appreciate it. Literally, we are analyzing this tape as we speak. We are going to have more details on it throughout this next two hours.

Joining us, CNN terrorism analyst Peter Bergen, author of "The Osama bin Laden I Know: An Oral History of Osama bin Laden." He's -- also, CNN's national security correspondent, David Ensor, is also joining us.

Peter, if indeed this is bin Laden on the tape, is it surprising that he would make a tape honoring al-Zarqawi? After all, they didn't particularly like each other, from many accounts.

PETER BERGEN, CNN TERRORISM ANALYST: Well, I mean, I think we have been expecting this tape for some time.

And I think, you know, if Octavia is -- thinks it's bin Laden, I -- I'm sure it is bin Laden. This was not unexpected. We have had another tape from Ayman Al-Zawahri also sort of bemoaning the death of Zarqawi.

And of course they're going to say that. But, in reality, I think a private part of bin Laden, and perhaps also Zawahri, are not unhappy about Zarqawi's departure. He was part of al Qaeda in Iraq, had pledged allegiance to bin Laden, but he wasn't taking cues from the central directorate -- directorate of al Qaeda on the Afghan- Pakistan border.

He -- he did stop the beheadings, at their request, it seems, but he continued attacking the Shia, which neither bin Laden, nor Zawahri wanted him to do. So, I think it's fully expected the tapes would come out, fully expected that they would make sort of a formal declaration of how great Zarqawi was.

But they may be happier about the new guy that's replaced Zarqawi, a guy who actually has known Zawahri since 1982, when he -- when he joined Egypt's Jihad group, somebody who might be more controllable.

COOPER: David, you have this bin Laden tape, if it is, in fact, bin Laden. Another bin Laden tape was released in April, another in May. Before that, he hadn't released a tape since January, so, three tapes now in three months. Read any significance into that?

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, clearly there's an effort, Anderson, to -- by -- by al Qaeda central to be relevant.

They are wary of -- they were very wary of -- of Zarqawi sort of taking over the center stage. Zarqawi was a formidable fund-raiser, according to U.S. intelligence, and was sucking money away from -- from the central al Qaeda organization, which, of course, given that the two main leaders are -- are in hiding, was not able to -- to sort of press its potential sources of money as easily as Zarqawi was.

And Zarqawi, of course, had such an image as -- as a man who was killing large numbers of American forces and -- and others in Iraq. But, as Peter mentioned, there was this tremendous discomfort between Zawahri and bin Laden on the one side and Zarqawi and the other over the issue of -- of -- of the Muslims, all the Muslims that Zarqawi was killing, the Shia, and the danger that -- that the -- that Zawahri thought that posed.

He wrote a letter to Zarqawi about that which was captured by U.S. intelligence -- but most analysts believe it is, indeed, genuine -- in which he appealed to him to stop the beheadings of Westerners and to stop with the massacre of Muslims.

As Peter mentioned, he did the former, but not the latter.

COOPER: Peter, you know, you -- I don't know if we can show this audiotape. It was put on the Internet. I don't know if we can just show it full-screen for just a moment, not listening to the sound, but just to -- to get a sense of the graphics, because, Peter, as we look at this, I mean, these graphics are incredibly well done, very high quality.

You have a -- a still picture of Osama bin Laden on one side. You have video images of Ayman Al-Zawahri. You have a little graphic logo. There's moving backgrounds. I mean, the -- the technological sophistication of this -- of this audio unit, of this -- this propaganda unit, is impressive. How are these tapes delivered? How are they made?

BERGEN: Well, you know, I mean, this is almost certainly a production of Al-Sahab, which means the clouds in Arabic, al Qaeda's media arm, which has been in business since the summer of 2001.

And they have released all the key statements from bin Laden and Ayman Al-Zawahri. They do have relatively sophisticated production methods. But there's a -- I'm not a -- an expert in this area, necessarily, but I think this is the sort of thing, you have a desktop computer, you could put this together, you know, let's say with, you know, Mac software, put together this kind of thing. But they're -- they're -- they're getting smarter. I mean, you know, since it's only an audio message of bin Laden, they're also putting it out with some video to kind of spice it up. And, you know, and in recent tapes from Zawahri, we're seeing them put them out in different languages.

The most recent -- one of the most recent tapes from Zawahri was in Arabic, Pashto, Dari. And we have -- we have seen them produce tapes with English subtitles, or even German subtitles, depending on which audience they're trying to affect.

So, you know, and I -- I think, as -- as -- as David just pointed out, you know, you know, bin Laden has been producing quite a lot of these recently. Zawahri has had an unprecedented number, three tapes in the last three weeks.

So, between -- the top leaders of al Qaeda seem not to be really feeling the heat of the war on terror, if they have the leisure to kind of make these tapes. And they have also got smart. They're not releasing them through Al-Jazeera anymore, which I think is quite problematic, in terms of tracing back the chain of custody of these tapes.

They're putting them straight on jihadi Web sites. It's much harder to find, unless you staked out every sort of Internet cafe in Pakistan, basically, an impossible task, since there are literally tens of thousands of them. It would be very tough to try and find out where this tape actually came from.

COOPER: So -- so, Peter, when they were being sent to Al- Jazeera, it was easier to trace back who -- what -- what hands they went through?

BERGEN: I think so, because, I mean, after all, Al-Jazeera has a limited number of bureaus. At least two of the tapes from bin Laden have gone to Al-Jazeera's bureau in Pakistan, in Islamabad. Others have gone elsewhere. But it's a limited universe.

If you think, you know, Pakistan is a place where not many people own their own computers. So, Internet cafes are literally everywhere. And it would be an impossible job to try and stake these Internet cafes out.

It was fairly obvious to anybody who is looking at this that there would be the response from both Zawahri and bin Laden about Zarqawi's death. But the practical method of actually trying to find the -- the courier who brought it to the Internet cafe, I mean, it would just be impossible.

And I think these guys have wised up to the fact it's smarter just to do it through the jihadi Web sites. A, you don't get "censored" -- quote, unquote -- by Al-Jazeera, which they have complained about in the past. And, B, it's much less amenable to detection.

COOPER: Peter -- I mean -- I mean, David, as you look at this, it's unlikely a tape like this would lead to any clues to -- to bin Laden's whereabouts. Obviously, there's no moving picture of bin Laden. There's not even any background you can get a sense of.

ENSOR: Well, that's right.

And, of course, bin Laden has put out an audiotape, which makes it that much more difficult. Zawahri's been doing videotapes. The working assumption of U.S. intelligence is that Zawahri is -- is more in touch, less deeply hidden, and is able to be connected to -- to cameramen.

I don't know if you saw. On Associated Press a week or two ago, there was a piece out of Peshawar by a -- a journalist I happen to know and trust, who said that she had met one of the men who, for various reasons, she had reason to believe, had been a cameraman that had actually filmed one or two of these videos in the past by -- by bin Laden and Zawahri.

And he said that he never knows when he's going to be summoned, and that he thinks that there are several of -- of these people who -- who help out with this, and the he -- he goes when -- when he's called, and he never knows where he's going. He's blindfolded and so forth.

Now, he hasn't done it in a couple of years. But, still, given that people are now findable, who -- the journalists can reach people who -- who work in that kind of way, clearly, people like bin Laden and Zawahri have to be worried about the chain of custody.

COOPER: Peter Bergen, how hard is it for Osama bin Laden to stay relevant? I mean, wherever he is holed up, clearly, he has access to -- to technology, to -- to news reports. He can get his message out. But how -- but much can he be beyond just a sort of spiritual figurehead?

BERGEN: Well, I think he can be more than that, because these messages -- I mean, you know, this message he's just delivered now is going to be seen by literally tens of millions of people around the world in the next 24 hours.

And it -- and it's going to be reported on in newspapers around the world. And, often, these messages aren't simply, you know, bemoaning the death of Abu Musab al-Zarqawi. Sometimes, these messages will have specific instructions, for instance, attack members of the coalition in Iraq. I think bin Laden has said that repeatedly. That's one of the reasons we saw an attack in Madrid in 2004.

That's one of the reasons we saw the attack in London, which we're about to come up to the first anniversary of on July 7. And -- and, so, through the medium of these tapes, they aim to stay relevant. And I think that, you know, to us, this may just seem like words, but, to their supporters, these -- these are like religious directives.

If they say attack President Musharraf in Pakistan, attack members of the coalition in Iraq, blow up Saudi oil facilities, which they have done, they have said that repeatedly, and -- and their -- their act -- their followers have acted on those instructions.

COOPER: And, David, that is, I guess, the concern, that -- that al Qaeda morphs into an organization which does not need direct contact with its -- its various tentacles. It can have, you know, Internet contact, ideological contact, and it is the spread of ideas which then these independent groups almost just take up as a rallying cry.

ENSOR: That's right.

And you have the -- sort of the homegrown terrorist phenomena that we have been talking about here in the United States recently, but, certainly, Europe has had -- had plenty of experience with in the last year or two, to its -- to its detriment.

So, yes, indeed, that is the great concern. At the same time, if I were bin Laden, I would be frustrated that all I can do is put out tapes. If -- if the media stopped paying as much attention to them, and people -- not so many people saw them, what else could he do? It's through these tapes that he reaches his -- his followers.

Of course, the -- since -- since you don't send -- since they're now putting them right on the Internet, they don't have that filter of Al-Jazeera, and they can get straight to their supporters, which obviously makes more sense for them.

COOPER: David Ensor, Peter Bergen, appreciate it.

We are going to be continuing to translate this tape throughout the hour. We will have some more information about it in this hour, and as well as in the next.

More news, though, from the war on terror, starting with a defeat for the White House, a big defeat. The Bush administration said it needed special tribunals to try detainees like that guy. Today, the Supreme Court said no.

Plus, on the trial of polygamist fugitive Warren Jeffs -- why his church is costing you money. He's on the FBI's most-wanted list, along with Osama bin Laden. We will talk to John Walsh from "America's Most Wanted" about the hunt for Warren Jeffs.

And it is the second fastest ride at Disney World. Now the death of a 12-year-old boy is raising questions about its safety -- that and more when 360 continues.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

COOPER: And we continue to follow this breaking news story, the release of an audiotape reported to be from Osama bin Laden. We continue to -- to translate it right now, that -- what you're seeing is the picture, the images that were posted on an Internet site that goes along with this tape. It is part of a production believed to be from the al Qaeda production unit, as you can see, quite a technologically sophisticated production. As I said, we're going to have a lot more on the tape over the next two hours or so.

But today saw a major -- another -- another major story, a major defeat for President Bush in the war on terror. For years, the administration has stated the need and claimed the power to try certain detainees in the war on terror not in civilian or military courts, but before special military tribunals, tribunals where suspected terrorists wouldn't have the right to cross-examine witnesses or even see all the evidence against them.

Today, the United States Supreme Court said no.

(BEGIN VIDEOTAPE)

COOPER (voice-over): It was Osama bin Laden's driver vs. the president of the United States. And the driver, Salim Ahmed Hamdan, won.

NEAL KATYAL, ATTORNEY FOR SALIM AHMED HAMDAN: Just think of it, what happened today. In no other country would this be possible.

COOPER: Writing for a 5-3 majority, Justice John Paul Stevens said the Bush White House's tribunal plan "lacks power to proceed because its structure and procedures violate both the Universal Code of Military Justice and the Geneva Conventions."

The majority also rejected the administration's claims that legislation authorizing the use of force after 9/11 also justified the tribunals.

In a stinging dissent read from the bench, Justice Clarence Thomas said the ruling would sorely hamper the president's ability to confront a new and deadly enemy.

But the justices did leave an out, maybe two. Mr. Bush can seek specific authorization from Congress, something the president today said he would do.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: To the extent that there is latitude to work with the Congress to determine whether or not the military tribunals will be an avenue in which to give people their day in court, we will do so.

COOPER: And the second out? The court said nothing about the constitutionality of holding prisoners, meaning the government could keep Mr. Hamdan and others behind bars indefinitely at Guantanamo and out of the courts.

(END VIDEOTAPE)

COOPER: Well, that, of course, would be a political decision. And politics is never far from this case, probably because the issues at hand are so large -- liberty, security and presidential power -- but also because the courts seemed to make the ruling itself as large as it could.

Here to talk about it, CNN legal analyst Jeffrey Toobin, and Mark Smith, author of "Disrobed: The New Battle Plan to Break the Left's Stranglehold on the Courts."

Gentlemen, thanks for being with us.

Mark, let me start off with you.

Were you surprised by what the Supreme Court did?

MARK W. SMITH, AUTHOR, "DISROBED: THE NEW BATTLE PLAN TO BREAK THE LEFT'S STRANGLEHOLD ON THE COURTS": Well, unfortunately, I was not surprised.

But the fact is that I'm really shocked at this decision, in the sense that I can't believe that the U.S. Supreme Court has decided that it really has a -- a critical say in how the president, the commander in chief of America's armed forces, ought to be fighting the war on terror. So, I'm not surprised, given the current composition of the Supreme Court, but I am a little shocked at its decision, how broad it really was.

COOPER: But isn't the -- isn't the Supreme Court basically saying, look, even in a time of war, the -- the executive branch has to follow the law?

SMITH: Well, no, what it's saying is that we, the Supreme Court, have an institutional obligation to ensure that the balance of power between the president and Congress is made sort of whole and kept in balance, which is odd, because what we really see here is that the Supreme Court is saying that Congress needs protection, in terms of its authority in the separation of powers.

It's really an odd thing. And I don't think it's good for the country to have the courts, a bunch of lawyers in Washington, making decisions about how to fight this war on terror.

COOPER: Jeff, do you agree with that?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, I think this is now the second time in just three years that the Supreme Court has said to the Bush administration, on the issue of Guantanamo, you're not doing it right. You're not handling it.

And, you know, I -- I think the fact that the administration has to follow the rule of law, has to follow the Geneva Conventions, which served our interests through fighting Adolf Hitler, I think it's reasonable to think we should comply -- we should comply with those rulings now.

COOPER: Well, why are you -- why shouldn't the -- why shouldn't the U.S. have to comply with those -- those laws?

(CROSSTALK)

SMITH: Well, let's talk about the Geneva Convention.

To me, that is, frankly, a joke in this case, because the Geneva Convention is designed for countries, legitimate sovereign nations, that have signed the Convention, that comply with the Convention, for good or for worse. And unlike what we're talking about usually, in the case of al Qaeda and the detainees at Guantanamo Bay, we're not dealing with a nation. We're not dealing with people that have complied with the Geneva Convention. Bear in mind that with -- al Qaeda captures people, they behead them.

COOPER: But isn't that what...

(CROSSTALK)

COOPER: I mean, the critics would say that is what makes us...

SMITH: And, so -- so...

(CROSSTALK)

COOPER: ... different from them, that we -- we actually do follow the Geneva Convention, even when those against us don't.

When the Japanese, during World War II, chose not to follow, you know, protocols and treated POWs horribly, we still continued to -- to treat their prisoners of war under the rules.

SMITH: But what -- what's different here is that we are trying to win a war against a violent enemy that has no respect for civilization, no respect for the United States of America, and no respect for the court system that they are now trying to use against us.

And, remember, these are unlawful enemy combatants, people that have operated outside of the traditional -- the traditional realm of normal combat. And, thus, they're not entitled to the typical protections that a soldier might have, if they were fighting on behalf of a legitimate nation that had signed the Geneva Convention.

COOPER: Jeff, I guess critics would say, though, we don't really know who these people are Guantanamo are, A, because we are not allowed to examine who they are. And we were told early on that these were the worst of the worst. And it turns out a bunch of them are kids who have just been released back in Kabul, and, after three years, suddenly are no longer a danger to America.

TOOBIN: You know, Anderson, I went to Guantanamo on a reporting trip.

And it was the most frightening experience of my journalistic life, because I thought, oh, I will -- maybe I will learn something when I went down there. And, you know, they showed you the outside, and they showed you a model cell.

But we have never learned anything about what the people are being held for and -- and who they -- who they really are. And, you know, maybe there have been some mistakes made. In a way, you know, this administration -- we -- we -- the court may be doing the administration a favor by narrowing the list to the people who really are dangerous, and making them be -- go to trial, when whatever kind of trial is worked out, and -- and keeping those people, and getting rid of the others, when there's no good evidence against them.

COOPER: Beyond opinion, whether you think it's right or wrong -- because, clearly, different people have different opinions -- what happens next legally? I mean, what -- what happens now?

SMITH: Well, what's interesting is, the Supreme Court gave the president a very big loophole and said that we're not challenging -- or we don't disagree that the president has the authority to essentially keep the Guantanamo Bay detainees there for the duration of the conflict.

Since we're talking about a conflict that is the war against Islamic fascism, which I don't think is going to end any time soon, they have actually given the president the opportunity to keep those detainees down there literally for decades.

What I think will happen, though, politically, is that the president will use this opportunity to sort of solidify his base and improve his popularity ratings by emphasizing this is another example of judicial activism...

COOPER: Sure.

SMITH: ... which will get the conservative base going, and then we will go to Congress and say, let's have a vote among all those people who are up for election in the fall. And let's see who is tough on the war on terror, and let's see who wants to fight the war on terror with subpoenas, lawsuits and judges.

COOPER: Right.

SMITH: And I think that's a fight that the president is in good shape....

(CROSSTALK)

COOPER: I have no doubt, politically, that's where we're going.

Just, legally, though...

TOOBIN: The action now moves to Congress, because what the court said was, if you want to devise a procedure to deal with these people, you have to get congressional authorization. So, now, instead of doing this process unilaterally, the president will have to go to Congress and get Congress to set up a plan, which the president can endorse.

And that's going to be a very difficult slog now, because the president's having much more trouble with Congress than he used to. And, you know, what the rules are is difficult. Not everyone agrees.

COOPER: Right.

TOOBIN: And that's going to be the next big struggle in this area.

COOPER: Jeff Toobin, appreciate it.

Mark Smith, appreciate it....

SMITH: Thank you.

COOPER: ... first time on the program. Thanks for being with us.

Agreeing with the ruling today or not, there is no disputing that the Bush administration is on record in all sorts of ways taking on an especially broad view of presidential power.

Today, as we have been discussing, the Supreme Court reined some of that power in, but, as CNN's Candy Crowley reports, by no means all of it.

Take a look.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): In the balance of power, tilt the scale toward the legislative branch. Democrats all but danced in the halls.

SEN. HARRY REID (D-NV), MINORITY LEADER: I -- I think that the aura of power that the president thinks he has does not exist.

CROWLEY: Even Republicans, at least the ones in the legislative branch, thought the president went too far.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: The problem with the way he chose to do this is that they dealt Congress out early on, and they paid a price in the court for that.

CROWLEY: Beyond Guantanamo, beyond suspected terrorist Salim Hamdan, this Supreme Court case was about power. The president claimed too much of it. The decision is not the end of the struggle and not the beginning.

STEPHEN HESS, PRESIDENTIAL HISTORIAN, BROOKINGS INSTITUTION: This is a president who came into office, who felt that, somehow, in recent years, the powers of the president had been eroded, and he was going to do something about it.

CROWLEY: For six years, most of it against the backdrop of war, George Bush has moved aggressively to assert executive power. He claimed his administration did not have to reveal the names of industry executives who advised the vice president's energy task force. The courts essentially agreed.

He signed an order allowing current and former presidents and vice presidents to restrict release of their papers. He has added more than 750 signing statements to new laws, offering his interpretation of the law, flagging portions he won't enforce, claiming they infringe on executive authority. He authorized warrantless surveillance of some international calls to and from the United States.

He claimed the authority to designate enemy combatants to be held indefinitely without charges, an authority upheld by an appellate court. And while he was White House counsel, Attorney General Gonzales said that the president can set aside laws and treaties for national security reasons.

ALBERTO GONZALES, ATTORNEY GENERAL: I think the decision not to apply Geneva in our conflict with al Qaeda was absolutely the right decision.

CROWLEY: This is not the first wartime challenge to presidential powers. Franklin Roosevelt's right to intern Japanese-Americans during World War II survived two Supreme Court challenges. But, during the Korean war, the court ruled as unconstitutional Harry Truman's attempt to take over U.S. steel mills that were threatening to strike.

Historians say this whole balance-of-power thing, the legislature, the president, the courts, has teetered across the generations.

HESS: Particularly when strong presidents who are Article -- remember, right in the middle -- they're Article II of the Constitution. They're pushing with sharp elbows in both directions, against Article I, the legislature, Article III, the -- the courts. And, sometimes, they win, and sometimes they lose.

CROWLEY: This time, this president lost.

Candy Crowley, CNN, Washington.

(END VIDEOTAPE)

COOPER: Well, the court's decision will not change life at Gitmo, at least for now. Here's the "Raw Data."

Currently, there are more than 500 detainees from at least 34 countries held at the naval base. At one point, the population exceeded 750. The prison -- the prisoners are kept in cells that are eight feet by seven feet. The cells are marked with an arrow pointing toward Mecca. Detainees who are cooperative are allowed to stay in dormitories and have other privileges.

Tonight's other major story: the flood crisis in the Northeast. The scope of this disaster is still emerging. More rain is falling, right now, in some of the hardest-hit areas. We will have the latest coming up from there.

Plus, one of the FBI's most wanted, fugitive polygamist leader Warren Jeffs -- tonight, major news to report about the potential collapse of his financial fortune. And we will talk to John Walsh about the odds of bringing Jeffs to justice -- when 360 continues.

(COMMERCIAL BREAK)

COOPER: Those are not pictures from hurricane Katrina. Those are just a few of the dramatic images that have come out of the northeast in the past few days. Across several states, some of the worst flooding in decades. And tonight rapid-fire lightning storms and rains continue in some towns. The flooding has claimed at least 14 lives and turned thousands of people into evacuees. We have two reports tonight. We begin with Allan Chernoff in Binghamton, New York. Allan, what's it like there now?

ALLAN CHERNOFF, CNN CORRESPONDENT: Anderson, last night I could not have possibly been standing here. In fact no one could have. The water was way too high. In fact, nearly to the height of that American flag, to the height of the top of the flag. And the current was far too swift. But tonight, two days after the storm, homeowners can finally return to assess the damage.

(BEGIN VIDEOTAPE)

CHERNOFF: Bad enough to have your home flooded. But Stacey Gould saw it happen to her restaurant, too.

STACEY GOULD, FLOOD VICTIM: It felt like I was going to fall apart yesterday. It's just really too much to bear to think I might, you know, at one time lose my home. And then if we can't financially recover from this, you know, with a business, it just seemed like -- it seemed too much to take on both ends.

CHERNOFF: About half the people in Broome County, New York suffered flood damage, and about 5,000 were unable to return to their homes. Though few were as hard hit as Stacey's.

GOULD: By the time we were done with the last of getting our TV and our dining room chairs and tables upstairs and everything, the house was completely surrounded.

CHERNOFF: Surrounded, but she thinks it still won't be covered by her catastrophic flood insurance.

GOULD: It was probably about, you know, up to here, but the fire department was there, and they said please don't do that. We've got a boat.

CHERNOFF: With her home engulfed, Stacey focused on trying to save her natural food restaurant, the hole in the wall. She and her business partner pumped three feet of water from the basement, then looked over the damage.

GOULD: A lot of our files, you know, they were in our desk drawers and stuff. So they're soaked, you know. I don't know. Some stuff is on computer. You know, but -- I don't know what you do about stuff like that. This is the freezer. Luckily it has a nice seal on it. But you can see we're going to have to get rid of a lot of the stuff that's on the base there. This represents, like, you know, 10,000, $12,000.

CHERNOFF: The business won't be covered by insurance either, leaving Stacey and her partner sifting through the restaurant to see just what can be salvaged.

(END OF VIDEOTAPE)

CHERNOFF: Tonight as you can see, Jim, Stacey and their friends are hard at work cleaning up. They're actually using shovels and brooms to get rid of about two to three inches of silt. Not sure if you can actually see it on my fingers, but it is just piled up inside. And what's this over here? This is a washing machine that was blocking one of the bathroom doors. It was floating. They had to use a hammer to knock down that door just so they could move this washing machine. Anderson?

COOPER: Unbelievable. Allan, thanks very much.

Now to New Hope, Pennsylvania, a city that sits right next to the Delaware River. The river that became really the enemy this week. Tonight New Hope is a city under curfew where 15,000 people are without power. I'd like to go live at this point to CNN's Jason Carroll, but it's simply raining too hard. Lightning makes it far too dangerous to be outside live. So here's a report he filed just a short time ago.

(BEGIN VIDEOTAPE)

JASON CARROLL, CNN CORRESPONDENT: Homes along the Delaware River partially submerged. Businesses, too. In New Hope, Pennsylvania, its charming shops, bed and breakfasts, underwater.

STEVE EBERSOL, BUSINESS OWNER: This is about a 50-stall parking lot. And the fence over there is the border up to the river. And then there's a big bank that drops down to what usually is a very low- running river.

CARROLL: Steve Ebersol owns this parking lot, this building and the bed and breakfast across the street.

EBERSOL: That water is trying to get into my basement even though it's got walls. It's basically just spitting right through the concrete block and coming in.

CARROLL: The Delaware River crested Thursday evening, six feet above flood stage. And while its waters are supposed to steadily recede, there's still a lot of debris in the water which is threatening the New Hope Bridge. It remains closed until further notice. Emergency officials say most people here evacuated. The area has flooded many times before.

CHIEF HENRY PASQUALINI, NEW HOPE, PENNSYLVANIA: We have become proficient with floods. This is our third flood in two years. And we will get the borough back and running, the business community back and running as soon as possible. CARROLL: Further north, the Susquehanna River in the town of Wilkes-Barre receded pretty quickly. A relief to people living here and to the army corps of engineers monitoring the levees. Are you surprised at all by the fact that the water has receded in this area so quickly?

MICHAEL SMITH, U.S. ARMY CORPS OF ENGINEERS: Yes, I am. This crest, even as late as yesterday, was predicted to stand for at least a day. We've already lost five or six feet.

CARROLL: Emergency officials lifted the evacuation order in Wilkes-Barre, but statewide, 34 counties were declared federal disaster areas.

GOV. ED RENDELL, PENNSYLVANIA: It's too soon to put a dollar figure on it. But in terms of loss of life, it looks like at least five lives, maybe six, in terms of loss of homes and properties and businesses and possessions and things that are dear to people, it's impossible to calculate.

CARROLL: Back in New Hope, disappointment among the Ebersols and other business owners at the loss before the 4th of July holiday.

CHRISTINE EBERSOL, BUSINESS OWNER: I think it's really going to hurt the town. This is a shame. It's a great place.

CARROLL: A place still waiting for relief. Jason Carroll, CNN, New Hope, Pennsylvania.

(END OF VIDEOTAPE)

COOPER: Well, new developments tonight on the polygamist fugitive we've been investigating for months. Warren Jeffs has been eluding the FBI, but is a judge about to hit his bank account big time? An account allegedly full of your tax dollars.

Plus tragedy at Disney World. A little boy dies after riding a roller coaster. 360 MD Sanjay Gupta looks at the dangers of coasters when 360 continues.

(COMMERCIAL BREAK)

COOPER: In case you missed it earlier, we bet not many people did, the latest round in the spat between Barbara Walters and Star Jones played out on CNN's "LARRY KING LIVE", take a look.

(BEGIN VIDEO CLIP)

LARRY KING, CNN ANCHOR: Why didn't you tell Barbara that you had spoken to people?

STAR JONES: Pretty much probably the same reason she hasn't spoken to me yet. She called you to talk to you about it. She didn't speak to me.

KING: She called me after the fact, though. JONES: But Larry, you should know, I wasn't told by Barbara that my contract was being -- not being renewed. My agent was told.

(END OF VIDEO CLIP)

COOPER: Star Jones held her own no tears. There is probably a poll being taken -- oh I'm sorry. Did you notice, I can't stop smiling all of a sudden? There's probably a poll being taken somewhere as to who -- did you see, she was smiling all the time, it was very strange. You can judge for yourself. We'll have highlights in our next hour. It was sort of a fascinating odd hour, if you will. Star Jones in her own words coming up in the next hour of 360. And a lot of smiles.

Also tonight, polygamist fugitive Warren Jeffs is about to lose control of millions of dollars permanently. A Utah judge is going to decide in the next few weeks how best to reform the United Effort Plan Trust which holds millions of dollars in real estate that's owned by Jeffs' FLDS church. The judge could appoint a non-FLDS trustee who will oversee about $110 million in real estate until the recipients are deemed suitable. That means basically Jeffs would no longer be in control and no longer benefiting financially from those funds. CNN's Randi Kaye has more on the problems with this trust and why the FLDS church is actually costing you money.

(BEGIN VIDEOTAPE)

RANDI KAYE, CNN CORRESPONDENT: Warren Jeffs may live thousands of miles from you but he may not be that far from your wallet. Jeffs and his followers are costing you money and getting away with it, critics say, by hiding behind religion.

MARK SHURTLEFF, UTAH ATTORNEY GENERAL: Their religious belief is that they are to what they call bleed the beast, the beast being the government. Why they hate the government, they will bleed it. They will take everything they can from it through welfare, through tax evasion and fraud.

KAYE: You see, as practicing polygamists, Jeffs and his group believe it's their religious right to have multiple wives and dozens of children. And often lean on taxpayers to foot the bill. Here's how it works. The men have multiple wives, but only one marriage is recognized as legal by the state of Utah. So the rest of the wives claim to be single moms struggling to raise a house full of dependents. That makes them eligible for government aid. So they collect welfare, lots of it, and it's all legal.

SHURTLEFF: More than 65 percent of the people are on welfare, they're on food stamps compared to about 6 percent in the general populations.

KAYE: Keeping Warren Jeffs and his followers honest is a challenge.

SHURTLEFF: He's like a crime boss. I mean, he runs an organization, an empire, where he has absolute control. KAYE: Utah Attorney General Mark Shurtleff hasn't filed charges, but he's investigating Jeffs for cooking the books, avoiding taxes, even setting up offshore accounts.

SHURTLEFF: He has them convinced from the moment they're born that he is God on earth. And that if you disobey him, if you leave his church, if you disobey his commandments, then you will burn in hell forever.

Say nothing, do nothing.

KAYE: A judge appointed accountant Bruce Wisen to take control of the group's $110 million trust and the land in it. Wisen's biggest challenge? Collecting more than $1 million in overdue property taxes from polygamist property owners living in Colorado City, Arizona where Jeffs' church is based. Is it their responsibility to pay?

BRUCE WISEN, SPECIAL FIDUCIARY OVERSEEING JEFFS' ASSETS: Well, it is. And they've received benefits of living on the trust land for free. They didn't pay for the land. In many cases, community efforts built the houses. So all they have to pay is utilities and property taxes. I don't think that's unreasonable.

KAYE: Why'd they stop paying? Because when Wisen took control of the trust, Jeffs ordered his members to stop paying taxes. So the standoff continues between religion and real estate and between Warren Jeffs and those hot on his trail. Question is, how much will it cost you before Jeffs is caught? Randi Kaye, CNN, Salt Lake City, Utah.

(END OF VIDEOTAPE)

COOPER: Another man on the hunt for Warren Jeffs is John Walsh of "America's Most Wanted." On his television program Walsh has spotlighted the case against Jeffs. We'll get his sense whether and how soon he may be able to be brought to justice.

And a little boy who died after riding a roller coaster at Disney World. What you might want to know about the dangers of roller coasters and how that might have happened when 360 continues.

(COMMERCIAL BREAK)

COOPER: Ah, the creepy dulcet tones of Warren Jeffs. If anyone has a sense of how to bring someone like Warren Jeffs to justice, its John Walsh, the host of "America's Most Wanted" showcased Jeffs' alleged misdeeds not long ago. To get his current thinking on the case, I spoke with Walsh earlier.

(BEGIN VIDEOTAPE)

COOPER: John, I guess one of the hard things about catching Warren Jeffs, not only does he have so much support, but he's also got funds, money, still coming in from all these construction companies that his sect owns.

JOHN WALSH, HOST, "AMERICA'S MOST WANTED": Well, absolutely. I mean, he's going to be a difficult fugitive to catch because he has so many of these cult member followers who tithe to him, or give him money, and he -- they estimate he has a trust fund that he manages of about $200 million. So he has the resources to go from compound to compound, to go in and out of the country. He goes to Mexico. He goes to Canada. So he is not only dangerous, and he is planning to have a showdown probably, he's got the resources to stay out there for quite a while.

COOPER: There's a report today that a third district court judge is close to deciding what to do with this trust fund, this FLDS trust fund. How big a role do you think does money play when it comes to Warren Jeffs being able to maintain, you know, his life on the run?

WALSH: Money's a huge factor. I mean, money lets this guy buy speedy vehicles, in these private compounds. He's buying private property to keep the police out. He has state of the art surveillance stuff, he's got bodyguards. Money's a huge factor of allowing Warren Jeffs to elude capture.

COOPER: It's also, I mean you see those pictures of this compound that they had built in Texas. And they've been sort of siphoning off their most loyal followers telling them to come down to this isolated ranch in Texas where they've built this huge -- we're looking at it now -- this large several story temple which is particularly interesting because Warren Jeffs, I've talked to his past followers who always said you didn't need a temple to communicate with God. Apparently now Jeffs says you do. There are those who look at that and say that's a last stand kind of building.

WALSH: Well, I hope it isn't a last stand, but I think you're right. And a lot of people think that he may retreat to this compound. Number one, some of the other cities that he's built compounds in or had followers in like Colorado City, Arizona, you can drive through those cities, and they're accessible to law enforcement. But when you surround yourself on private property with fences and state of the art surveillance system and you build this temple to God, maybe he's planning to go down there. I mean, he's so crazy and deluded. Maybe he's planning to make a last stand there.

COOPER: Does it surprise you that he hasn't been on the FBI's most-wanted list sooner?

WALSH: Well, really, he was wanted on local charges. And the FBI usually comes in when someone is a state to state fugitive or an international fugitive. But I'm glad to see them take the opportunity and to take the initiative to put Warren Jeffs on their ten most wanted because he's obviously a flight risk. He is a flight risk. He's a fugitive right now, and he is obviously traveling. He's got compounds in Canada and Mexico so he's going across borders.

But by the FBI putting him on the ten most-wanted list, I think people will realize what a low-life creep he is, how dangerous and how crazy he is, and that he's nothing but a coward pedophile, and hopefully someone will have the guts to say I don't really believe Warren Jeffs anymore. I'm not going to buy this cult rhetoric. I know now from watching CNN or "America's Most Wanted" or whatever, that he's a pedophile, that's he's a creep and he has potential for violence and I'm going to turn him. I'm going to do the right thing.

COOPER: John Walsh, appreciate you joining us. Thanks John.

WALSH: Thank you.

(END OF VIDEOTAPE)

COOPER: Coming up, the shot of the day. I'm going to give you a little hint. It involves Japanese television. But first, Erica Hill from "HEADLINE NEWS" has some of the other stories we're following tonight. Erica?

ERICA HILL, CNN ANCHOR: Anderson, seven terror suspects accused of planning to attack the Sears Tower apparently had other targets in mind. A prosecutor says one of the men arrested last week in Miami has told investigators he and others planned to bomb five FBI buildings. The suspect in question has allegedly sworn allegiance to Al Qaeda, though authorities say the men never actually made contact with the terrorist group.

President Bush and his Japanese counterpart, Prime Minister Junichiro Koizumi are sending a stern warning to North Korea, don't even think about launching a long-range missile. Mr. Koizumi says if a launch were to happen, the U.S. and Japan would apply various forms of pressure, but he didn't give any details as to just how that would be done.

And in Washington, investigators have now recovered that laptop computer and external drive containing personal data on more than 26 million veterans and active-duty personnel. It went missing more than a month ago. The FBI's initial tests on the computer and drive show nothing had been accessed since the equipment was stolen.

And here's a reason for you to smile. Canadian scientists say they've found a way to re-grow teeth and bones. The process involves ultrasound technology. For now it's being used to fix damaged teeth. Scientists though hope to use it to actually replace teeth that were knocked out. They say the process might also help people grow taller by stimulating bone growth. That would be wild.

COOPER: That's amazing. Erica stay right where you are.

HILL: I'm not moving.

COOPER: It's time for the shot. And here's some of the video that caught our eye today from ifilm in our never ending quest to find the best from Japanese TV. Its cats watching ping-pong. It's really all about the voiceover, though. Listen.

See, I could watch this all day.

HILL: Yeah, it never gets old, does it?

COOPER: It's not though as good as the all-time favorite from Japanese TV. You know what that is of course?

HILL: The sailors?

COOPER: Seaman Ship.

HILL: There you go. And if that's not a good way to recruit sailors I don't know what is.

COOPER: Shh. No talking during "Seaman Ship." [ speaking Japanese ]

COOPER: There you go. Alright. There it is.

HILL: Now we can talk again?

COOPER: We have a no-talking rule during "Seaman Ship."

HILL: That's fine. I wasn't aware of it. So I'll be sure to obey it next time.

COOPER: Very good thanks.

HILL: See you later.

COOPER: Coming up, we'll have the latest on the terrible weather that has hit the northeast. The flooding is still causing problems for so many thousands of people unable to return to their homes. Some losing their businesses right before the important July 4th holiday. We'll have their stories. And an update where the weather is now coming up.

Also tonight, a tragedy at Disney World. A 12-year-old boy died after riding a roller coaster. The question is how could it happen? 360 M.D. Sanjay Gupta takes a look.

And also we're breaking news tonight, we are translating the new terror tape believed to be -- purported to be from Osama bin Laden. What it says, what it means, and does it offer any clues that would lead to his capture? When 360 continues.

(COMMERCIAL BREAK)

COOPER: Tragedy struck today at what is called the happiest place on earth. A 12-year-old boy died after riding the rock 'n' roller coaster at Disney-MGM studios in Florida. It is the ninth Disney theme park fatality since 2003. Earlier I spoke with 360 M.D. Dr. Sanjay Gupta about the health risks of riding roller coasters.

(BEGIN VIDEOTAPE)

COOPER: Sanjay, there's obviously a lot we don't know yet about what happened. But if this 12-year-old child was healthy when he got on the ride, what about a roller coaster could actually cause someone's death?

DR. SANJAY GUPTA, CNN SR. MEDICAL CORRESPONDENT: It's very unusual for a perfectly healthy person who is not horsing around in some way or, for example, might have choked on something, you know, something unusual like that to die on one of these rides. A couple things to point out Anderson, a lot of people know the rides have become much bigger and faster than before. But that's not really the crucial point here.

The crucial point is something related to g-forces. That really has nothing to do with the height or speed of a roller coaster, it has to do with how fast the roller coaster actually makes turns. So you know you could have a sort of a low roller coaster in terms of not being that high that could still have a lot of g-forces. Apparently this wasn't one of those roller coasters. So it's a little bit hard to say. Also, you know, could it have unmasked some health problem that neither the parents nor the boy even knew that he had? Those details will probably come out over time.

COOPER: Why is a g-force concern? What happens to your body with that sudden acceleration?

GUPTA: Well a couple things -- the two organs that they are concerned about the most are the brain and the heart. So for example, the heart first, when you have sudden g-forces like that, could it be so significant that it actually prevents your heart from pumping blood to the rest of the body even for a short period of time? It's called cortis emotio, which means the heart actually stops. And you've seen that in some relatively minor injuries, even from playing baseball for example and taking a hit to the chest.

Could that happen as a result of the significant g-force? Perhaps. Again, not likely. With regards to brain injuries, you have some very small blood vessels at the top of the brain that sort of connect the brain to the outer layer around the brain. Could one of those blood vessels have actually torn and caused a bleed? Again, I'm saying it's very unlikely for these things to occur. This has been studied pretty widely, but these are the sort of things that I think the people will be thinking about that are examining him.

COOPER: And I guess any ride where you have large numbers of people going through, just statistically, you're bound to have some injuries, some fatalities.

GUPTA: Yeah, you know and actually what's interesting is the congress of neurological surgeons which is sort of the organizing body to which I belong, has actually studied this pretty significantly and they have found that for the most part, if you're not one of the -- you see the sign when you go into the roller coaster ride, "pregnant people, people who have back problems, people who have had recent surgery, you should not be riding this ride." They have found that really takes care of about 99.9 percent of the people who could possibly be injured on one of these rides. For the rest of the people, it becomes a question of some underlying medical disease that had not yet been diagnosed or horseplay, something that wasn't expected.

COOPER: It is a tragedy, obviously. We'll be learning more about it in the coming days. Sanjay thanks.

GUPTA: Thank you, Anderson. COOPER: Straight ahead, the new terror tape purported to be from Osama bin Laden. We are translating it, analyzing it line by line. We'll have the latest.

Also the drug war on the border, the Canadian border we're talking about. Though a rare inside look as smugglers do their dirty work and some pay the price.

And a vaccine that prevents cancer, a killer form of it that strikes young women. The question is why is it so controversial? 360 MD Sanjay Gupta comes back, checks the facts for us. As well as this...

(BEGIN VIDEO CLIP)

STAR JONES: The same week that Rosie went on that attack, Barbara called her and invited her to be a co-host of the view.

(END OF VIDEO CLIP)

COOPER: Imagine that. She says she's been dissed and dismissed. Oh that's right, Star Jones in her own words, next on 360.

(COMMERCIAL BREAK)

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